In what may be the most disturbing news of the day, moments ago the BOE announced it is halting its own version of QE3, and capping the asset purchase program at £375 billion after "some policy makers questioned its effectiveness in supporting a recovery that remains lackluster." Could it be that even that peculiar Homo Sapiens subspecies known as "economist" is starting to realize that when applying the same "remedy" time after time to absolutely no avail, and where even the market no longer responds to unlimited injections of liquidity, then perhaps it is time to end said "remedy" altogether? And how long until the voodoo shamans in the dark lit room at Marriner Eccles follow through? Sadly, if Japan, and its 9 (so far) rounds of easing, is any indication, we have a lot more pain to go before what has been glaringly obvious to every hotdog vendor and shoeshine boy is also understood by Economics Nobel prize winners.

From Bloomberg:

The nine-member Monetary Policy Committee led by Governor Mervyn King kept its target for asset purchases at 375 billion pounds ($598 billion) today, ending its third round of quantitative easing. The decision was forecast by 35 of 45 economists in a Bloomberg News survey. The remainder had forecast an increase of as much as 50 billion pounds.

Today’s move suggests the London-based central bank may focus on credit-boosting initiatives such as the Funding for Lending Scheme to ignite growth. Increased inflationary pressures may also have prompted policy makers to hold fire even as surveys point to renewed weakness after the U.K. economy surged 1 percent in the third quarter.

BOE Deputy Governors Paul Tucker and Charles Bean both suggested in recent speeches that asset purchases may no longer have the same impact on the economy as when first introduced in 2009. At the same time, Martin Weale has questioned whether loosening policy is right with inflation above the central bank’s 2 percent target.

The UK needs more hedonically edible iPads because inflation appears to be an issue:

Inflation was at 2.2 percent in September and King said last month that recent energy costs increases mean it will stay above the goal “well into next year.” Renewed signs of price pressures combined with the third-quarter gross domestic product data and comments from MPC members led banks including Citigroup Inc. and Barclays Plc to abandon forecasts of more QE today.

“The widespread expectation of unchanged policy marks a sharp turnaround from forecasts just a few weeks ago that QE would be expanded,” said Chris Crowe and Blerina Uruci, economists at Barclays in London. “This is partly due to evidence of firmer inflationary pressures.”

The MPC had new growth and inflation forecasts at today’s meeting, which it will publish next week. Minutes of the meeting, showing how the committee members voted, will be released on Nov. 21.

Finally, since one never says never in Keynesville, it is likely only a matter of time before the insanity returns:

Even with QE halted, the Bank of England still has the FLS, which it set up with the U.K. Treasury and is aimed at boosting lending. The program began in August and as of last month, 30 financial institutions had signed up, including Lloyds Banking Group Plc and Barclays.

“QE still has a benefit and those benefits will stay there -- they’re not unwinding any purchases,” said Alan Clarke, an economist at Scotia Capital in London. “And they won’t close the door on it, they’ll leave their options open.”

And now, we look forward to the ECB confirming that when it comes to failed monetary system, for every good cop there is at least one absolutely insane cop. [link to www.zerohedge.com]

...moments ago the BOE announced it is halting its own version of QE3, and capping the asset purchase program at £375 billion after "some policy makers questioned its effectiveness in supporting a recovery that remains lackluster....

"The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title."

Never attribute to malice that which is adequately explained by stupidity.

The woman who is not pursued sets up the doctrine that pursuit is offensive to her sex, and wants to make it a felony. No genuinely attractive woman has any such desire. - H.L. Mencken, In Defense Of Women

Treasuries rose, pushing 10-year yields down the most in five months, as Obama’s re-election bolstered speculation the central bank will maintain a bond-buying program that San Francisco Fed President John Williams this week said may exceed $600 billion.

Full steam ahead.

The Fed bought $2.3 trillion in securities in its previous two rounds of bond-buying and has swapped its short-term Treasuries with longer-term securities in a program called Operation Twist, due to expire in December.Feroli predicted QE3 will last through the first half of 2014. Mortgage debt purchases may reach $700 billion, and when Operation Twist expires at the end of the year, the Fed will also start buying Treasuries at a similar pace, Feroli said.

Gee, somebody figured out that borrowing more money from the people who loaned you money to pay the money that you can NEVER repay is not a viable "solution?"

Go figure.

There are only two viable solutions: Force the banks to forgive the loans.... ha. ha.

Or, hang the bankers. All of them.

Quoting: Anonymous Coward 27307504

Actually yes further borrowing can be a solution, or at least permit the system to chug along until something else can rescue it. It's called inflation, printing. It reduces the real size of debts and can stimulate business activity.

That is, unless all that extra money is just put right back into interest earning reserve accounts at the Fed, rather than being lent into circulation. We can thank for that:

(1) the Fed paying above-market interest on those reserve deposits by mamber banks, and

(2) Dodd-Frank, which forbids banks to take any risk without setting aside an outrageous amount of risk-free "capital".

As long as those two things stand, I don't see any chance of recovery.

...moments ago the BOE announced it is halting its own version of QE3, and capping the asset purchase program at £375 billion after "some policy makers questioned its effectiveness in supporting a recovery that remains lackluster....

Quoting: Luisport

This is HUGE.

Once QE stops and interest rates rise, it's GAME OVER for the Ponzi Pyramid that dominates Western economies.

If this were to happen in the US, with its $17 Trillion debt ... KABOOM!

...moments ago the BOE announced it is halting its own version of QE3, and capping the asset purchase program at £375 billion after "some policy makers questioned its effectiveness in supporting a recovery that remains lackluster....

Quoting: Luisport

This is HUGE.

Once QE stops and interest rates rise, it's GAME OVER for the Ponzi Pyramid that dominates Western economies.

If this were to happen in the US, with its $17 Trillion debt ... KABOOM!

Obama should take note. Whilst we in the UK have our fair share of flaws, at least the Bank of England has seen it is ridiculous to go on printing more money. Why does the American government seem to think that it is still the solution? Isn't Obama's big 'plan' to continue on the track of the last four years ie. printing more money?

Er... America, are you really going to keep on the current course? Are any of the states going to say "enough is enough". I mean if even the morons at the BoE have figured it out.

Obama should take note. Whilst we in the UK have our fair share of flaws, at least the Bank of England has seen it is ridiculous to go on printing more money. Why does the American government seem to think that it is still the solution? Isn't Obama's big 'plan' to continue on the track of the last four years ie. printing more money?

Er... America, are you really going to keep on the current course? Are any of the states going to say "enough is enough". I mean if even the morons at the BoE have figured it out.

Quoting: Anonymous Coward 23992770

the BoE will continue printing, they will just call it by another name....